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JAPAN: Sell-Side Views Shifting in Favour of USD/JPY Downside

JAPAN

With softer global equities, heightened short-end vols, Kanda/Kono's comments and the USD break lower among the numerous drivers of the JPY, sell-side are shifting toward USD/JPY downside, with several analysts tweaking and firming their views for USD/JPY lower ahead:

  • JPM Spot: Maintains healthy USD/JPY short, and watches close below 50-dma
  • Mizuho: USD/JPY breaking uptrend has strengthened unwind of JPY shorts, but caution is needed and JPY may resume depreciation theme
  • MUFG: USD/JPY may adjust to Y155, due to flattening US curve, concern over intervention.
  • SocGen: JPY carry trade losing attractiveness - largely due to narrowing policy differentials, increased volatility.

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